AnoraMahmudova

U.S. stocks ended Thursday’s thinly-traded preholiday session with modest losses as investors seemed reluctant to bid up prices of indexes that are already hovering near all-time highs.

The S&P 500 and Nasdaq Composite booked their first consecutive losses in three weeks, as the “Trump rally” lost momentum over the past few sessions.

The S&P 500
SPX, -0.07%
closed 4.22 points, or 0.2%, lower at 2,260.96, only 11 points below its all-time high set last week. Of the S&P 500’s 11 main sectors, seven closed in negative territory. Consumer discretionary stocks were among the biggest losers, with the sectors finishing 1% lower.

The Dow Jones Industrial Average
DJIA, +0.14%
finished 23.08 points, or 0.1%, lower at 19,918.88. The blue-chip index struggled to hit 20,000 as the psychologically important level has eluded it for days amid stalled momentum.

The tech-heavy Nasdaq Composite
COMP, -0.22%
declined 24.01 points, or 0.4%, at 5,447.42, but is still hovering near its record level set on Tuesday.

“To end the year where we are, despite everything we’ve had on the calendar this year is remarkable,” said Mark Kepner, managing director of sales and trading at Themis Trading.

Indeed, the Dow is up about 14% year to date, the S&P 500 is on track to post an 11% return, and the Nasdaq Composite Index is aiming for a nearly 9% advance, with five trading sessions to go until the end of 2016. The gains are far better than the consensus Wall Street forecasts of low single-digit gains and come after what had been one of the worst starts to a calendar year in history.

Still, the market’s recent retrenchment could be a sign that Wall Street investors are seriously reassessing the pro-business proposals by President-elect Donald Trump that have supported the brisk stock-market rally.

Kepner warned that any signs that there are delays in implementing and executing fiscal policies such as tax cuts, deregulation and infrastructure-building promised by Trump could result in sharp pullbacks.

However, Wall Street’s hopefulness in the coming Trump administration has been persistent.

Kate Warne, investment strategist at Edward Jones, said stocks could continue to march higher next year.

“The most likely policy change that has not been talked much is deregulation, some of which Trump can do without the help of Congress. We expect stocks to grind higher, but expect pullbacks if things don’t materialize as fast as people are hoping,” Warne said.

“With the DJIA flirting with the 20,000 level, we are reminded that millennium and century marks on major stock indices have traditionally acted like rusty doors, requiring several attempts before finally swinging open,” said Sam Stovall, CFRA’s chief investment strategist, in a note.

“Therefore, it should come as no surprise if stocks take a breather to digest recent gains,” he said.

Consumer-spending growth in November slowed as incomes stagnated, and following several strong months of spending gains. The PCE price index, the favored inflation gauge of the Federal Reserve, rose 1.4% compared with a year ago.

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Dow Jones Network

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